The Blessings of Henna

Dyeing the Hair.

The dyeing of hair with Henna (and Katam) is well established from the Sahih Sunnah. Al Muwaffaq Al Baghdadi says, "The colour of Henna is like Fire and is well liked and attractive. It has a pleasant smell. Most of the early generation (Salaf) dyed their hair with it."

The Holy Prophet's encouragement to change the colour of the grey hair;

It was narrated by Abu Dharr (radhi Allahu anhu) that the Prophet (sallallahu alayhi wasallam) said: "The best things with which grey hair are changed are Henna and Katam."

Sunan Abi Dawood Book 34, Hadith 4193. Classed as Sahih by Al Albani.

And also;

It was narrated by Abu Huraira (radhi Allahu anhu) that Allah's Apostle (sallallahu alayhi wasallam) said, "The Jews and the Christians do not dye (their grey hair), so you shall do the opposite of what they do (i.e. dye your grey hair and beards)."

The Holy Prophet's personal use of Henna and Katam;

It was narrated that ‘Uthman bin Mawhab (radhi Allahu anhu) said: “I entered upon Umm Salamah (radhi Allahu anha) and she brought out for me a hair of the Messenger of Allah (sallallahu alayhi wasallam), which was dyed with Henna and Katam.”
Sunan Ibn Majah Vol. 1, Book 32, Hadith 3623. Classed as Sahih.

Abu Bakr Siddique's use of Henna and Katam;

It was narrated by Anas (radhi Allahu anhu) that "When the Prophet (sallallahu alayhi wasallam) arrived (at Medina), there was not a single companion of the Prophet who had grey and black hair except Abu Bakr (radhi Allahu anhu), and he dyed his hair with Henna and Katam (i.e. plants used for dying hair). Through another group of narrators, Anas bin Malik (radhi Allahu anhu) said,. "When the Prophet arrived at Medina, the eldest amongst his companions was Abu Bakr. He dyed his hair with Hinna and Katam till it became of dark red color."

Sahih al Bukhari Volume 5, Book 58, Number 257

Dr Samas Qasi confirms that Henna paste may be applied to the scalp for lengthy periods (4-12 hours) so that the purifying and astringent substances in Henna may work on clearing the scalp of germs, parasites, dandruff and excess oily secretions.  

To make henna paste for dying hair and skin, fresh henna powder should be mixed with enough lemon juice so that it has the consistency of yogurt, and then it should be tightly covered and allowed to sit for 24 hours prior to use. This allows the acidic lemon to break down the henna leaves and release the dye. Henna should be left on the skin or hair for a minimum of 4 hours to ensure a darker stain.

Usefulness in the treatment of skin, nails, wounds and burns.

The water in which henna leaves have been boiled is good for the treatment of burns, as is the paste itself.

The paste of Henna is also useful in the treatment of brittle nails. Women are encouraged to apply henna to their hands and nails so as to make their hands distinct from those of men and unfortunately this custom is usually only reserved for special occasions like Eid. However, it must be noted that henna patterns which depict living creatures, mythical animals or which copy the traditional symbols of other religions are forbidden in Islam.

Dr Samas Qasi said that Henna paste is also beneficial in the treatment of fungal infections, particularly those that occur in the folds of skin and between the toes and it also helps to heal wounds. 

Henna blossoms placed inside folded garments also prevent moth attack.

Henna Water is useful as a detoxifyer and cleanser of the kidney and liver.

References - 

Islamic Medicine - The Key to a Better Life. By Yusuf Al Hajj Ahmad. Darussalam 2010.